Rice prices ease in late August but still higher year-on-year

Prices of rice eased for a second consecutive week in the third week of August but they were still higher compared to year-ago levels, the Philippine Statistics Authority (PSA) reported.

Despite the slight easing in prices week-on-week, consumers may have to endure another round of prices increases due to the continued delay in the National Food Authority’s procurement of imported rice.

In its latest report, the PSA-Bureau of Agricultural Statistics said that price cuts were sustained for both wholesale and retail rice as the farmgate price of palay (paddy rice) was on its third week of downturn.

“As of August 20 to 26, farmgate palay price was quoted at P21.30 per kilogram, or down by 0.42 percent over the previous week. But relative to the previous year’s level, it was still up by 17.23 percent,” PSA-BAS said.

Prices of well-milled rice in the wholesale market averaged P41.26 per kilo, or 0.53 percent lower than the previous week, but were 13.6 percent higher from a year ago.

A decrease of 0.14 percent was recorded for retail rice with an average posted price of P43.95 per kilo, but compared to the previous year’s record, the average price was still higher by 15.23 percent.

For regular milled rice, wholesale and retail prices further eased week-on-week but were still higher year-on-year, PSA-BAS said.

The average wholesale price of P38.35 per kilo was cheaper by 0.08 percent from last week’s level but was more expensive by 15.34 percent from a year ago; while the retail price of P40.58 per kilo was down by 0.20 percent from last week but was 15.71 percent higher from last year at P35.07 per kilo.

As of Monday, Presidential Assistant on Food Security and Modernization (PAFSAM) Secretary Francis Pangilinan said that the NFA Council was still finalizing its rice procurement scheme after the bidding for the supply of 500,000 MT of rice last Wednesday was declared a failure.

Pangilinan earlier said that they may consider rebidding the entire volume, or conduct a government-to-government transaction – with only Vietnam and Cambodia allowed to join.

An NFA source said that the rice tender failed because the current leadership implemented several cost-cutting measures by passing some of the expenses to the suppliers.

“They are trying to prove that they can buy rice at a lower price by forcing these traders to accept the approved budget for the contract, which is much lower than the prevailing market price in the world market. Their estimates were unrealistic, that’s why these traders are not keen to lower their prices,” the source said.

“In fact, it is the first time in the NFA’s history that all of the bid offers were non-responsive,” the source added.

Pangilinan denied that they had intentionally underestimated the budget for the rice procurement, saying, “We need to protect government coffers.”

Meanwhile, the source said that the failed bidding only exposed the Philippines’ vulnerability to the realities of a globalized market and to the political decisions by governments who are the biggest market players who view rice as a vital commodity.

“The more they delay the procurement, the more prices will increase,” the official said.